In 2003, a financial planner in Calgary started working with the owner of Oilfield Welding Limited to provide employee benefits to the owner and his staff. Initially, the owner wanted to save for retirement by reinvesting all of his surplus earnings back into the business. However, he appreciated the potential creditor-proofing of life insurance and established a small retirement savings opportunity using life insurance. When Oilfield Welding Limited hired a new group administrator, the employee benefits program was put out to bid and the business was moved. Shortly thereafter, the financial planner was notified that the life insurance he had placed on the owner of Oilfield Welding Limited and his wife would be replaced by two new policies as recommended by another advisor. Would it be beneficial for the clients to replace their existing insurance? How should the financial planner proceed?

Learning Objective:

This case is intended for senior undergraduate students as well as graduate students in business disciplines such as finance that deal with personal financial planning situations and regulation. The case represents a comprehensive, real-life situation faced by a financial advisor. After completing this case, student will be able to do the following:

Analyze financial and policy data

Consider alternative approaches to client concerns

Identify the criteria needed to make informed decisions

Develop an action plan for clients

Understand some of the ethical dilemmas faced in the life insurance industry